As we have noted in the past, the explanation for the continued rise in the price of oil for many observers is partly the rising demand in the developing world, notably China and India.
The New York Times today has an editorial that makes the argument again, and points out that prices of other commodities such as steel in which speculative futures trade is not a factor, continue to rise in parallel.
Much as we would like to think that some unconnected factor is at the root of the uncontrolled energy price spiral, we cannot wish away the impact of higher demand in some countries. We use this moment to argue that India must look at alternatives, and not continually pump up the demand for petroleum products. The benefits of sustainable mobility beg repetition, and we emphasise that all State governments should tax fuel and fund public transport alternatives, pedestrianisation and bicycle use.